The Coon Rapids City Council will take a look at the impact of the prepay gas ordinance since it went into effect Aug. 1.
Councilmember Bruce Sanders at the last council meeting Sept. 18 asked for a work session on the ordinance.
Other councilmembers agreed and at a work session Tuesday evening, they set Tuesday, Oct. 30, 6:15 p.m., for the meeting.
According to Sanders, his request was not made because four people spoke at the council open mike segment prior to the start of the regular meeting.
Three of them opposed the ordinance. Two, who were employees of Holiday gas stations in the city, said the prepay law had hurt business, made customers angry and benefited businesses in other communities.
Sanders told the Herald late last week that he had already planned to request the work session on the ordinance.
“It’s time to take a look at it, to see what effect it has had and how it has impacted businesses,” he said.
He has had a lot of calls and emails, mostly from friends and contacts in the community, and many of them opposed the ordinance, said Sanders, who voted for the ordinance’s adoption as part of a 5-2 majority.
The ordinance has had both positives and negatives and Sanders has no preconceived ideas going into the work session, he said.
In asking staff to schedule a work session, councilmembers also requested staff to provide information on the impact of the law on businesses in Coon Rapids as well as its effect on gas stations in neighboring communities in terms of business and numbers of no-pay/drive offs.
When the prepay gas ordinance went into effect Aug. 1, Coon Rapids became the first city in Minnesota to implement such a law.
It was brought before the council by Police Chief Brad Wise as a means to counter the increasing number of no-pays/drive offs in Coon Rapids, which was causing a spike in the city’s crime rate.
Under the ordinance, prepayment includes paying by credit card at the pump or going inside and paying cash before the pump is turned on.
But there is an exception to the prepay requirement that Sanders offered and it was accepted by the council majority.
That states, “It is an exception… if business owners enter into a civil agreement with customers, pursuant to which customers may activate a fuel pump prior to payment.
“Such an agreement shall include identifying information of the customer that may be used by the business owner for seeking compensation in the appropriate civil court should the customer fail to pay for fuel after activating the pump.”
According to Sanders, that option has been used by some of the smaller businesses, but has not worked for some of the larger stations.
But one of the open mic speakers, who backed the ordinance, said she uses that option at the Coon Rapids gas station she goes to and it has worked well for her, she said.
Jerry Charmoli, owner of Highway 10 Mobil, has been a supporter of the ordinance from the start because of the negative impact no-pay/drive offs had had on his business.
He has put in place an agreement with customers that allows them not to have to prepay at the pump if they don’t wish to, according to Charmoli.
It’s called the Rizur Card, which Charmoli describes as a loyalty card where customers can provide their name, address, phone number, email address and other pertinent information and receive the card, he said.
When they come to the Mobil station to get gas, they can insert the Rizur Card at the pump, which triggers a “little star” at the cash register inside, allowing the employee to give the customer the go ahead to pump without paying first, Charmoli said.
Indeed, customers still have the choice of prepaying at the pump by then inserting their credit card if they wish, he said.
Either way, they can take advantage of gas-saving coupons that he offers his customers with the card, according to Charmoli.
Right now, Charmoli said he has some 400 customers signed up for the Rizur Card program.
Charmoli hopes those numbers will grow to the 2,800 he had in his customer loyalty program prior to prepay, he said.
Prior to the ordinance enactment, there was strong opposition from most gas operators-owners in Coon Rapids, who wanted the council to embrace a civil process to deal with gas no-pay/drive offs.
Rick Dehn of Dehn Oil in Anoka, who owns and operates the Marathon station at Foley and Northdale boulevards, was one that spoke out against the ordinance and wanted the council to support the civil remedy.
His views on the ordinance have not changed since it went into effect.
According to Dehn, his financials for the first month of the prepay, August, showed a 5 percent drop in business from the same month a year ago.
“Up to then, our sales had been flat compared with a year ago,” Dehn said.
That 5 percent would pay for expenses over and above normal operating costs, he said.
And the fact that his station is so close to Blaine, which does not have prepay, has not helped business, Dehn said.
While the prepay ordinance has eliminated no-pay/drive offs, that was never a major issue at his Marathon station, he said.
And he has not implemented the exception provision in the ordinance because of the requirement that names, addresses and phone numbers be provided, rather than license plate information, according to Dehn.
A license plate number, not a name and address, is needed to go after a no-pay/drive off, Dehn said.
If the ordinance exception called for only a license plate, his station is set up to implement that at all pumps, he said.
“That would be workable,” Dehn said.
But Dehn is pleased that the council plans to take another look at the ordinance, he said.
According to Wise, the police department received a number of emails and phone calls when the prepay ordinance went into effect and responded to all of them.
Several of the emails that he received came from people who were not aware that the prepay ordinance had been approved and implemented in the city, Wise said.
The ordinance has addressed the issue of no-pay/drive offs, he said.
“There are no calls now,” Wise said.
And Wise hopes and expects that will be reflected in a reduction in the city’s crime rate, he said.
When Wise initiated the prepay ordinance as a crime prevention tool to minimize the number of no-pay/drive offs from Coon Rapids retail fuel businesses, there had been 492 in 2010 and 481 in 2011.
And 15 percent of the gas thefts in 2011 were by people in vehicles with stolen license plates, he said.
Those numbers did go down after the ordinance was introduced and while the council was considering its adoption because gas stations were not reporting them, Wise said.
“But that did not mean they were not occurring,” Wise said. “A crime was still being committed.”
And when gas prices are high, as they are now with gasoline selling for close to $4 a gallon, the no-pay/drive offs increase, according to Wise.
“When gas prices are high, there are more drive-offs,” Wise said.
In the 5-2 council vote to adopt the ordinance, Mayor Tim Howe and Councilmember Jerry Koch voted no. Councilmembers Paul Johnson, Denise Klint, Melissa Larson, Sanders and Scott Schulte voted yes.
Peter Bodley is at [email protected]